Commodity Fetishism

I’d like to introduce you to a common type of fetish you may not have heard of, but regularly enjoy.

It’s called commodity fetishism and was first described by Karl Marx way back in 1867.

It’s having a significant impact on the profitability and sustainability of regional business.

How so?

There are two headlines that continue to dominate the media.

 

They are: households complaining about the cost of living and, businesses complaining about the cost of operating.

We have been groomed with new lifestyle expectations; totally convinced that everything must be had as an absolute necessity.

But as business owners we have also been groomed as consumers of inputs.

Our behaviour as business owners can also drive-up the cost of doing business.

Social researcher Mark McCrindle calls this expectation inflation.

Are we so convinced that as business owners we must have the latest, the biggest or the most of everything?

A tempting proposition.

However, overcapitalising our business beyond its reasonable productive capacity will derail it.

But why would any business owner in their right mind deliberately derail their own business?

A driving force behind commodity fetishism within a business is risk appetite.  Financial literacy is a key measure of risk appetite – normally.  But when commodity fetishism takes hold, we make purchasing decisions the implications of which we don’t understand.

Tammy May of My Budget fame has a simple yet thriving business helping those who have ‘overcapitalised’ the household budget.

Interestingly, the Regional Australia Institute identified that poor financial skills is potentially the single biggest factor negatively impacting the prosperity of regional business.

As we hang-up our stockings and think about spending, perhaps as business owners we should make 2015 a ‘socks-n-jocks’ year.